buy buy buy, page-8

from todays argonaut notes

http://www.argonautlimited.com/files/0185_05_09_11.pdf

Target Price: $6.90

Forge Group � Hammering Home the Message
Forge has delivered on its stated objective of winning $100m+ construction projects to drive
its revenue and eps growth in a big way.
The Company, last week, received a Notice of Award (NOA) from Fortescue Metals for
engineering, procurement and construction works on the Solomon Primary Crushing Hubs.
The current contract value is approximately $200m. The completion date is scheduled for Q4
2012.
One week prior, the 50/50 Clough Forge Joint Venture was awarded an Early Contractor
Involvement (ECI) contract for the Port Materials Handling Facilities (Package 3) for Hancock
Prospecting�s Roy Hill Iron Project. At Clough�s annual results announcement CEO John Smith
stated the execution contract could exceed $500m.
Crucially, FGE has the balance sheet capacity
to fund multi-hundred million dollar projects
and the corresponding increased working
capital needs.
These are huge developments. Both contracts
are also strategically signifi cant, as they
should foster long term mutually benefi cial
relationships with Fortescue and Hancock.
Successful delivery will put FGE in a new
league.
We estimate that the order book is now
~$575m. This does not include potential
revenue from execution work that is likely to
come from the Roy Hill Iron Project.
We recently increased our FY12 revenue
forecast to $533m on the back of a ~$360m
order book. This result gives us greater
confi dence in our forecast and implies risk to
the upside.
FGE has also been active in developing
its business in Africa, where it has been
operating for over 15 years. Revenue from
the region looks set to expand signifi cantly
with iron ore market penetration, changes
to the operational model and potential